Landsea Green Group Company Limited 2018 Annual Results Presentation 25 March 2019
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Landsea Green Group Company Limited2018 Annual Results Presentation
25 March 2019
CONTENT
1/ Results Highlight
2/ Financial Performance
3/ Business Review
4/ Outlook for 2019
5/ Appendix: Company Overview
01
1/ Results Highlight
02
Results Highlight
Stable growth in
contracted sales
and high quality
project
development
◼ Contracted sales of “Landsea Products” amounted to RMB38.1 billion, increased by 19%;
◼ During the year, the Company invested in 28 new projects (20 projects in the PRC and 8 projects in the US),
and recorded a saleable GFA of 2.46 million square meters and saleable value of RMB38.8 billion. 80% of the
new projects were obtained through mergers and acquisitions, entrusted development and in form of share
with great advantage in terms of acquisition cost and there was no occurrence of record-high land prices
Continuous improvement of
ability in product diversification
◼ Landsea continued to develop its ability in research, development and innovation of differentiated green
products, actively explored innovative business in different sectors including residential building renovation,
green renovation of office, apartment building renovation and commercial community, and further
strengthened its competitive advantage;
◼ Leveraged on the outstanding product advantage, Landsea attracted various investment institutions and
famous major and medium-sized enterprises to establish complementary strategic cooperation with the
Company, and received income from development service of RMB1.0 billion, increased by 33%, and recorded
profit after tax of RMB0.35 billion, increased by 12%;
Steady and
solid financial
performance
Significant increase
in profitability
◼ As of the end of the year, net gearing ratio amounted to 39.8%, decreased by 4.3 percentage points as
compared with 44.1% of last year;
◼ Under the backdrop of overall increase in finance cost in the market, the weighted average finance cost of
the Company for the year was 7.4%, basically the same as last year (off-balance sheet weighted average
finance cost was 6.3%);
◼ Debt structure continued to optimize, in which the proportion of short-term debt decreased to 10%, and the
cash to short-term debt ratio was 8.7 times with sufficient cash;
◼ Net profit amounted to RMB1.44 billion, increased by 99.9%; net core profit amounted to RMB1.27 billion,
increased by 36%; earnings per share amounted to RMB27 cents, increased by 93%;
◼ ROE continued to increase to 30%, 11 percentage points higher than last year;
◼ Gross profit margin increased to 29%, 4 percentage points higher than last year; net profit margin increased
to 19%, 7 percentage points higher than last year;
03
2/ Financial Performance
04
2018 Annual Results
05
Note 1: Core net profit = net profit – fair value gains/losses – foreign exchange gains/lossesNote 2: EBITDA = profit before tax – foreign exchange gains and losses – gain from disposal of equity interest + finance cost + capitalized interest expense (on combined basis and project basis) + depreciation and amortization
RMB million 2018 2017
7,561 6,214 1,347 22%
1,000 753 247 33%
3,854 4,095 (241) -6%
2,553 1,331 1,222 92%
Income from rental of properties and property management fee 154 35 119 340%
2,154 1,524 630 41%
3,539 493 3,046 618%
667 191 476 249%
Net profit 1,441 721 720 100%
Net profit attributable to the shareholders of the company
Core net profit Note 1 1,269 932 337 36%
Core net profit attributable to shareholders 941 791 150 19%
Change amount Year-on-year change
Sales revenue recognized in the balance sheet
Revenue from development service
Property projects in the PRC
Property projects in the US
Gross profit
Share of sales revenue recognized of joint ventures and associates
Share of net profit of joint ventures and associates
2018 Annual Results
06
RMB million 2018 2017 Year-on-year change
ROE Increased by 10.8 percentage points
93%
Increased by 4.0 percentage points
26.9% 19.3% Increased by 7.6 percentage points
31.5% 21.1% Increased by 10.4 percentage points
19.8% 11.1% Increased by 8.7 percentage points
55.0% 63.4% Decreased by 8.4 percentage points
Off-balance sheet gross profit margin of property projects of joint ventures and associates
24.5% 22.2% Increased by 2.3 percentage points
EBITDA margin 35.2% 25.0% Increased by 10.2 percentage points
Core net profit margin 16.8% 15.0% Increased by 1.8 percentage points
Net profit margin Increased by 7.5 percentage points
Earnings per share (RMB)
Gross profit margin
Combined gross profit margin of property business
Gross profit margin of property business in the PRC
Gross profit margin of property business in the US
Gross profit margin of development service
287
1,331
2,553
531
2016 2017 2018
表内美国地产收入 应占合联营收入
3,908 4,095 3,854
178 493
3,008
2016 2017 2018
表内中国地产收入 应占合联营收入
4,845 6,214
7,561 178
493
3,539
2016 2017 2018
表内营业收入 应占合联营收入
550 753
1,000
2016 2017 2018
Segment revenue - Continuous growth in operational performance
Total revenue (including share of revenue of joint ventures and associates)
Unit: RMB million Unit: RMB million
Revenue of property business in the US (including share of revenue of joint ventures and associates)
Unit: RMB million
Revenue of development service from independent third parties
Unit: RMB million
Revenue of property business in the PRC (including share of revenue of joint ventures and associates)
07
Revenue recognized in balance sheet
Share of revenue of joint ventures and associates
Revenue of property business in the PRC recognized in balance sheet
Share of revenue of joint ventures and associates
Share of revenue of joint ventures and associates
Revenue of property business in the US recognized in balance sheet
Information of major items in the balance sheet
08
Note 1: Bank balance and cash (excluding restricted cash) = Bank balance and cash - Restricted cash and cash equivalentNote 2: Net debt (excluding restricted cash) = Interest bearing debts - Bank balance and cash (excluding restricted cash)
RMB million
Bank balance and cash(excluding restricted cash)
Note 15,405 3,342 2,063 62%
Total assets 26,775 20,321 6,454 32%
Total liabilities 22,014 16,622 5,392 32%
Total equity 4,761 3,698 1,063 29%
- Equity attributable to shareholders of the company 4,384 3,492 892 26%
Interest bearing debts 7,025 5,429 1,596 29%
Long-term borrowings 6,341 3,255 3,086 95%
Short-term borrowings 684 2,174 (1,491) -69%
Net debt (excluding restricted cash)Note 2
1,620 2,088 (468) -22%
Net debt to equity ratioDecreased by
percentagepoints
31 December 2018 31 December 2017 Change amount Year-on-year change
Liabilities on and off-balance sheet
09
7,025 5,429 1,596 29%
5,405 3,342 2,063 62%
1,620 2,088 (468) -22%
Decreased by22.5 percentage points
Remain flat
1,914 2,345 -431 -18.4%
2,187 1,889 298 15.8%
273 (456) 729 Not applicable
Decreased by4.3 percentage points
Increased by0.2 percentage points
RMB million 31 December 2018 31 December 2017 Change amount Year-on-year change
On-balance sheet:
Interest bearing debts
Bank balance and cash (excluding restricted cash)
Net debt (excluding restricted cash)
Net debt to equity ratio
Weighted average finance cost
Off-balance sheet:
Cash of joint ventures and associates attributable to the Group
Interest bearing debts of joint ventures and associates attributable to the Group
(Net cash) net debt
Net debt to equity ratio(taking into account of off-balance sheet net debt)
Weighted average finance cost under off-balance sheet equity
Solid credit indicators
Unit: RMB million
10
7.2x
1.5x
2.3x
3.5x 3.0x
1.7x
2.6x
7.0x
8.7x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
Total liabilities /EBITDA EBITDA/Finance cost Cash/Short-term liabilities
2016 2017 2018
Effective management and control of liabilities
Sufficient banking facilitiesDiversified financing channels
Debt financing
• Overseas: successfully issued public offering bonds of US$200 million in the
Hong Kong public market in April-May 2018
• Domestic: Actively expanded financing channels, achieved major
breakthrough in financing through assets securitization. As the first
cooperative long-term rental apartment REITS in China, the “Ping An
Huitong - Ping An Real Estate Landsea Rental Housing Series Asset Support
Special Plan” was approved with a shelf scale of RMB5 billion, and
successfully issued one phase in a scale of RMB1.068 billion with preferential
forecasted yield of 4.6%;
EB-5financing
• Provided long-term financing with low interest rate by offering reliable
immigrant investor opportunities, balance of EB-5 financing amounted to
RMB580 million;
As of the end of December 2018, the Company maintained good long-term
cooperation relationship with various financial institutions and secured facilities in
aggregate of RMB49.4 billion, of which RMB41.79 billion or 85% was unutilized,
and secured facilities from Bank of Nanjing, Industrial Bank and Bank of Dalian in
amount of RMB8.0 billion, RMB5.0 billion and RMB6.0 billion, respectively.
Results of management and control of liabilitiesUnit: RMB million
B(Stable)
B2(Positive outlook)
B(Positive outlook)
境外主体评级
11
3,322
2,088 1,620
109%
56%
34%
0%
20%
40%
60%
80%
100%
120%
0
1,000
2,000
3,000
4,000
2016 2017 2018
Net debt(excluding restricted cash)
Net debt ratio (excluding restricted cash)
Real estate fund
in RMB’0000
PartnersType of funds/Investment
focus/InvestorsInvestment projects
Total size of assets
under management
Merger and acquisition and
restructuring of distressed assets
Holding long-term rental apartments
Shijiangzhuang Luquan Project
(Phase I), Hangzhou Linglongyue,
Chongqing Landsea Crystal, Wuhan
Xudong Project
Nanjing Ziyue Plaza Project, Shanghai
Senlan Project, Shanghai Yangpu
Huangxing Building
⚫ As of the end of 2018, the asset size managed by Green Fir Investment amounted to RMB8.76 billion;⚫ In May 2018, Green Fir Investment was recognized as one of the “TOP 10 Real Estate Equity Investment Funds in 2017”, two funds under its
management were recognized as “Real Estate Merger and Acquisition Fund with Largest Size in 2017” and “Most Recognized Existing Real Estate Investment Fund in 2017”, respectively
12
Note 1: This urban renewal fund was liquidated in March 2019 and recorded IRR of 25.9%, senior level LP IRR of 16.7% and junior level LP IRR of 39.9%
Urban renewal
Other private capital LP
Project-based merger and acquisition fund Guangzhou Jiefang Building Project
Shanghai Changfeng Huiyinmingzun1
Hangzhou Huilan Community, Ningbo Qingchengyu
3/ Business Review
13
Contracted sales
Contracted sales amount
Contracted GFA
Year-on-year growth of sales amount
In 2018, Landsea Group and its joint
ventures and associates delivered the
following results under “Landsea Products”
243.84272.33
42.96
74.1433.69
35.01
2017 2018
Contracted sales amount(in RMB hundred million)
1、2線 3、4線 美國United States
Third and fourth-tier cities
First and second-tier cities
In RMB hundred million in ‘0000m²
14
Average selling price of contracted sales
In RMB
New projects
Region CityNumber of
projectsShare of saleable
value
Saleable value Saleable GFA(RMB hundred
million)(‘0000 sq.m.)
Yangtze River Delta
Nanjing 1 5% 19 7Hangzhou 1 6% 23 13
Suzhou 3 12% 45 19Kunshan 2 4% 16 5
Changzhou 1 6% 22 10Nantong 1 9% 33 25Suqian 1 4% 15 21
Subtotal 10 44% 172 100
Mid-western China
Chengdu 4 21% 83 69Wuhan 1 3% 13 11Xi’an 2 4% 15 10
Subtotal 7 29% 111 91
Bohai Rim
Jinan 1 11% 43 24Shijiazhuang 1 3% 11 12
Subtotal 2 14% 54 37Pearl River Delta Guangzhou 1 / Self-owned Self-owned
United States United States 8 13% 51 18
Total
Average equity holding1
Note 1 : Average equity holding is calculated based on saleable value.
15
Projects available for development
16
Region CityNumber of
projectsShare of
saleable value
Saleable value Saleable GFA
(RMB hundred million)
(‘0000 sq.m.)
Yangtze River Delta
Shanghai 4 1% 15 5Nanjing 16 25% 300 106
Hangzhou 5 2% 30 15Hefei 3 2% 27 13
Suzhou 9 7% 83 36Ningbo 1 1% 9 6
Wuxi 6 5% 61 39Changzhou 2 2% 23 11
Nantong 1 3% 33 25Xuzhou 1 2% 20 33Others 6 6% 67 65
Mid-western China
Chongqing 1 3% 38 23Chengdu 11 18% 224 161Wuhan 3 4% 51 16Xi’an 2 1% 15 10
Changsha 1 0% 5 9
Bohai Rim
Beijing 1 1% 10 3Tianjin 3 1% 13 8Jinan 1 4% 43 24
Shijiazhuang 1 1% 7 7Others 3 2% 20 21
United StatesWestern US 14 8% 96 34
Eastern US 4 2% 29 2
Total
Average equity holding
Note 1: Saleable GFA = Total GFA – GFA sold;
Note 2: Saleable value = Saleable GFA * Average selling price
As of the end of 2018, projects
managed by Landsea:
Development projects are mainly located in first and second-tier
cities, and a small portion of them are located in the core area of
third and fourth-tiered cities; projects in the United States are
mainly in portal cities in east and west coast
Saleable GFA1 Saleable value2
RMB hundred million‘0000m²
Leading differentiated products of green construction
17
Healthy temperature and humidity
Comfortable airflow
Healthy sound and lighting condition
Healthy decoration
Good water qualityHuman oriented
intelligent building
Daylight shadow simulation
Wind condition simulation
Heat island effect simulation
Optimize products and achieve the goal of
differentiated green construction through professional
environment simulation analysis and design
Achieve the value of human
oriented product differentiation
Lighting condition simulation
Airflow simulationSound condition
simulation
Manhattan,
New York
Shanghai
Xinxijiao
Shanghai Landsea
Green Center
Shenzhen
CEIBS
Product innovation and breakthrough – Urban renewal
18
Manhattan,
New York
Shanghai
Xinxijiao
Shanghai Landsea
Green Center
Shenzhen
CEIBS
Honours and awards
Top 100 Property Developers in China
8 consecutive yearsTop 10 Best
Performing Property Developers in China
2018
“Construction 21 International” Healthy Construction Solution
Ranking 1st Globally
Landsea XinxijiaoProject
Beijing Yanqing Passive House
First project in China awarded Germany
PHI Plus Gold AwardLandsea Xinxijiao
Project
2018
Green Property Operator of the Year
in China
15th Elite Award
Outstanding Community Award
Chengdu Landsea GreenHangzhou Landsea
CrystalTianjin Langhong
Garden
19
Asset-light model focusing on minority interests
Tianjin Zhongfu, Tishane Investment Holding, Nanjing Jindong
Property, Nanjing Jinjingwei Property, Wuxi Xinghai Property,
Shangyi Group, Jiangsu Wandu Property and Rugao Jinding
Property
Famous major andmedium-sized enterprises
Other enterprises
Investmentinstitutions
Chengdu Landsea Green
Hangzhou Linglongyue
Chongqing Landsea Crystal
Wuhan Xudong Project
Shijiazhuang Luquan Project (Phase I)
Kunshan Huaqiao and Zhoushi projects, etc.
Nanjing Landsea Green
Hangzhou Landsea Green
Suzhou Hengtong Project
Wuxi Taihu Lujun
Hefei Wanxin Gaoxin Luyuan, etc.
Zhongfu-Landsea “Three-Gen House”
Nanjing Landsea Mangrove
Wujiang Shangyi Motor Town Phase II
Baoding Xishanyue, etc.
20
Landsea ‘s advantages of ability,
experience, brand and differentiated
products in green building sector
Carry out different types of asset-light business models through
cooperation with complementary financial institutions, famous
major enterprises and medium-sized enterprises
New profit growth drivers
+ Diversified investment risks
Partners Major institutions of in-depth cooperation Related projects
Shanghai Construction Group, Wuxi Taihu New City Management
Committee, Suzhou Science and Technology Town Management
Committee, Hengtong Group, Nanjing Communications Group,
Wanxin Group, CCNC and Cathay Group
4/ 2019 Business Outlook
21
Property development
2019Outlook
22
Focus on the core business
of Green Property
Adhere to the strategies
and continue the development
in core urban area
Expand to Greater Bay Areaand establish a nationwide business network
Make further development in the
four major portal cities
in the United States
朗诗永远在路上LANDSEAALWAYS ON THE WAY
Investor Relations E-mail: [email protected]
Landsea team climbing Mount Elbrus on 3 August 2018
23
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